8/10/2023 0 Comments Monopoly rules![]() An economy where firms possess too much market power breeds opposite conditions. Firms that wish to thrive and grow are supposed to cultivate their relations with all these stakeholders, or risk losing them to competitors. It also leads to higher quality, lower prices, and better deals for consumers, workers, and other producers in the supply chain. Th e common wisdom is that, in a fair economy, market competition fosters innovation as firms attempt to build on each other’s advances. ![]() By the time we notice the changes, it’s often too late. So we sit like frogs in a pot of simmering water, undisturbed by the aggressive consolidations of corporate power around us. For at least a while, our food tastes the same our prescriptions cost the same our quality of service seems the same. Corporate names and logos blur together in a sea of deals reported only in the most boring articles for only the most boring lawyers. Year after year, thousands of firms across the economy swallow their competitors or other businesses in the supply chain to control more of their market.īut should we actually care about the unions of these corporate leviathans any more than we do about royal weddings? With our economy controlled by tangles of subsidiaries and shell companies anchored in exotic locales, keeping score of who owns whom seems like a futile effort. In 2018, the pharmaceutical firm Bayer is taking over the agricultural giant Monsanto in a 62 billion dollar deal. Two years later, Amazon purchased the Whole Foods chain, while the CVS pharmacy brand acquired the insurer Aetna. ![]() Chemical companies Dow Chemical merged with DuPont and on the food side, Kraft and Heinz became one. The year 2015 alone saw a reported 4.7 trillion dollars’ worth of merger and acquisition deals. To understand this rapid concentration of wealth and income, we must also consider the metastasis of corporations into colossal trusts, happening at the same time as the government shirks its duty to protect consumers and workers. But patrimony alone cannot account for how aggressively the owners of capital have been able to commandeer more than their fair share. That so few families have so much to pass on certainly contributes to inequality. Inheritances and other intra-familial transfers of assets explain some of this phenomenon. Today, the richest one percent controls 40 percent of the country’s wealth and about 90 percent of all income gains. The statistics are depressingly familiar. The problem is that since the 1970s, the slice of income going to workers has not kept up with their share of contribution. We become better at creating and selling more stuff and in turn, our pie of national income grows larger. Much like the first Gilded Age, advances in technology have magnified American productivity. By national income, Piketty means the sum of labor income (the wages earned by workers) and capital income (the earnings from physical assets like houses and factories, and financial assets like investment accounts and corporate profits). In Capital in the Twenty-First Century, the economist Thomas Piketty attributes the spike in American inequality to an imbalanced distribution of the national income. ![]() If this sounds familiar, it’s because our own Gilded Age has all the symptoms of the first. Magie and George had lived through an era marked by rapid economic growth, deep inequality, political corruption, and sprawling industry trusts controlled by a few men. These calls for bold reforms emerged from anxieties of the first Gilded Age. Magie admired the radical philosopher Henry George, and hoped the Single Tax rules would educate players of all ages about his proposal for common land ownership. No individual could really win the Single Tax game, other than by collaborating to break up all monopolies. Residual funds were redistributed as higher wages for everyone. These public funds paid for public utilities, transportation, and college, which then became available to everyone for free. For any player to erect properties or collect a fine on an existing property, the Treasury first had to receive rent on the land. Once activated, the Single Tax required players to redirect all fines and rents on empty lots into the Public Treasury’s coffers. At any time, the players could choose a more egalitarian future by voting in the Single Tax rules. Magie’s game, called “The Landlord’s Game,” was like the version you grew up playing, in that it could be won by accruing as many land lots, properties, and cash as possible. T he game of Monopoly was originally quite d ifferent when it was first patented in 1904 by a progressive woman named Lizzie Magie.
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